Kenya’s mining sector is experiencing a transformative shift, fueled by a series of legal reforms aimed at creating a more favorable environment for investors. With abundant untapped mineral resources and growing government support, the country is positioning itself as an attractive destination for both local and international players.

This article explores the latest legal developments, insights from key policymakers, and how investors can leverage the new regulatory landscape to unlock opportunities in Kenya’s mining industry.

1. Overview of Recent Legal Reforms

Lowered Royalty Rates

To make the mining sector more competitive, the Kenyan government recently revised the royalty fees. The Ministry of Mining slashed gold royalty rates from 5% to 3% of the gross value. This move is expected to attract more private investors into gold exploration and processing, particularly in high-potential regions like Kakamega and Migori.

Lifting of the Licensing Moratorium

After several years of halting the issuance of mining licenses due to regulatory and compliance concerns, the government lifted the moratorium in early 2023. The result? A 96.7% increase in credit extended to the mining sector, growing to KSh 49.3 billion by September 2024, according to the Central Bank of Kenya. This signals growing investor confidence in the sector’s new direction.

Streamlined Licensing and Local Consent

The Ministry of Mining has also restructured the licensing system. Investors must now seek consent from both the local communities and county governments. This ensures a participatory and transparent process that minimizes land conflicts and promotes local ownership of mineral resources.

2. What Key Policymakers are Saying

CS Ali Hassan Joho

Cabinet Secretary for Mining, Blue Economy, and Maritime Affairs, Salim Mvurya, has been vocal about the government’s commitment to reforming the sector. He has emphasized the role of local leadership in creating a peaceful environment for mining investment and recently announced the formation of a special mining police unit to ensure legal compliance and protect investors.

He also revived plans to build a gold refinery in Kakamega, a move that could help local artisanal miners and enhance value addition within the country.

MP David Gikaria

The Chair of Parliament’s Energy Committee, David Gikaria, recently stated that lawmakers are in the process of drafting new legislation that will provide legal backing to investment security in the mining industry. He specifically mentioned Chinese investors and other foreign firms as key stakeholders who need assurance that their investments are protected by law.

3. Key Opportunities for Investors

Value Addition and Processing

The government is moving away from exporting raw minerals and is encouraging local processing. The planned gold refinery in Western Kenya is expected to benefit over 15,000 artisanal miners. Investors can seize opportunities in refining, processing plants, and mineral certification facilities.

Strategic Minerals and Green Energy Transition

With the global demand for green technology on the rise, minerals like lithium, graphite, and rare earth elements are gaining value. Kenya has large deposits of these resources, and now that the licensing freeze has been lifted, more exploration licenses are being issued.

There’s also strong potential for partnerships in mineral beneficiation and battery supply chains, especially as countries look to diversify away from China-dominated markets.

Infrastructure Support

The Ministry of Mining has also announced the deployment of new field vehicles and support tools to aid in geological surveys, inspections, and enforcement. Coupled with developments like the Standard Gauge Railway and the Lamu Port corridor, logistical support for mining is steadily improving.

4. A New Era for Mining in Kenya

The recent reforms have set the stage for a new era in Kenya’s mining industry, one that is transparent, investor-friendly, and geared towards value addition and sustainability. For investors, this is the perfect time to consider entering or expanding within the sector.

The legal framework is becoming more robust, community support structures are improving, and untapped resources remain vast. With the right strategy and local partnerships, mining in Kenya presents not just a profitable venture but a chance to be part of Africa’s resource-driven growth story.

Conclusion

Kenya’s new mining reforms mark a critical milestone in its journey toward becoming a mining powerhouse. Investors who act now can position themselves ahead of the curve as policies continue to evolve in favor of sustainable and inclusive development.

If you’re an investor looking to explore opportunities in Kenya’s mining sector, consider reaching out to the Ministry of Mining, engaging local consultants, or visiting upcoming industry forums to learn more.

The mining sector has long played a pivotal role in shaping Africa’s economic landscape, and Kenya is increasingly making its mark in this space. With the global demand for critical minerals rising, new technologies emerging, and sustainability taking center stage, Kenya and other African nations are reimagining how mining contributes to their growth. In this post, we explore key trends transforming the mining industry and how they’re affecting Kenya and the broader African context.

1. Technological Advancements are Driving Efficiency

Globally, mining companies are investing $20 billion annually in digital transformation, and Africa is catching up. Technologies like automation, remote sensing, drones, and AI are being introduced across exploration, drilling, and mineral processing.

In Kenya, companies such as Base Titanium have already integrated real-time data analytics and digital monitoring to enhance operational efficiency. The use of Unmanned Aerial Vehicles (UAVs) for geological mapping has reduced exploration times by over 30%, cutting costs and increasing precision in mineral discovery.

As Kenya continues to invest in smart mining, the adoption of technologies will be crucial in tapping into the country’s estimated $62.4 billion worth of untapped mineral resources, according to the Ministry of Mining.

2. Sustainability and ESG are no longer Optional

With global consumers and investors demanding responsible sourcing, Environmental, Social, and Governance (ESG) standards have become a non-negotiable part of mining. In Africa, the World Bank has committed over $300 million to promote sustainable practices in mining through various initiatives, including the Africa Mining Legislation Atlas (AMLA).

In Kenya, the Mining Act of 2016 has pushed companies to integrate sustainability, including mandatory Environmental Impact Assessments (EIAs) and community development agreements. Base Titanium, for example, spends around KSh 120 million (approx. $900,000) annually on community development programs in Kwale County, which include health, water access, and education initiatives.

Furthermore, efforts to transition mining operations to renewable energy sources like solar and geothermal are gaining traction. Kenya’s geothermal potential, over 10,000 MW, offers a clean energy alternative for mining projects, particularly in the Rift Valley region.

3. Artisanal and Small-Scale Mining (ASM) is being Formalized

ASM employs over 8 million people across Africa and contributes over 20% of the continent’s total mineral production, yet it remains under-regulated. In Kenya, the sector involves around 250,000 miners, mostly in gold-rich counties like Migori, Kakamega, and Turkana.

The government is actively supporting formalization through capacity-building programs, licensing, and access to financing. In 2022, the Kenya National Chamber of Commerce and Industry (KNCCI) partnered with the State Department for Mining to train over 5,000 ASM operators on safe mining practices and financial literacy.

Formalization efforts aim to increase the sector’s contribution to GDP, currently estimated at 0.8%, with ambitions to raise it to 10% by 2030 under the Kenya Mining Policy Framework.

4. Exploration and Resource Mapping are Expanding

Mineral exploration across Kenya is on the rise, with heightened interest in rare earth elements (REEs), gold, coal, and titanium. Notably, Kenya is home to the largest rare earth deposits in Africa, estimated at 30 million tonnes in the Mrima Hills area of Kwale County.

In 2023, the Ministry of Mining partnered with the Finnish Geological Survey (GTK) for a KSh 3.2 billion ($24 million) national airborne geophysical survey, aiming to create a comprehensive mineral map of the country. The results are expected to attract foreign investment and help identify strategic minerals critical for the global green economy.

5. Infrastructure Development is Catalyzing Growth

Mining is infrastructure-intensive. Roads, railways, power, and water systems are vital to transporting ore and powering operations. According to the African Development Bank (AfDB), inadequate infrastructure increases mining costs in Africa by up to 30%, limiting global competitiveness.

Kenya is responding with strategic investments. The Standard Gauge Railway (SGR) has eased transportation of minerals from inland mines to Mombasa Port, reducing transit time by 40%. Additionally, the construction of Lamu Port under the LAPSSET corridor will enhance mineral exports to Asia and the Middle East, unlocking mining potential in northern Kenya.

6. Continental Integration and AfCFTA are Opening Markets

The African Continental Free Trade Area (AfCFTA), launched in 2021, is projected to boost intra-African trade by 52.3% by 2030. For mining, this means better access to regional markets, harmonized regulations, and shared infrastructure.

Kenya stands to benefit from cross-border collaborations with mineral-rich neighbors like Tanzania, Uganda, and the DRC. For example, the Lake Victoria Gold Belt, which spans Kenya, Uganda, and Tanzania, holds immense potential for joint mineral exploration, value addition, and exports.

Moreover, harmonizing mining legislation across East Africa will facilitate knowledge transfer and attract large-scale investors, transforming the region into a globally competitive mining hub.

Conclusion: A Promising Future wth the Right Tools

From digitization and ESG compliance to resource mapping and regional integration, Kenya and Africa’s mining sector is evolving rapidly. While challenges like informality, infrastructure gaps, and environmental risks remain, the opportunities are far greater.

With mineral exports contributing KSh 35 billion ($270 million) to Kenya’s economy in 2023 and rising, strategic investment, policy reforms, and regional cooperation will be key to unlocking the full potential of the sector.

Mining in Africa is no longer just about extraction, it’s about innovation, inclusivity, and impact. Kenya is well-positioned to lead this transformation.